Still, excuses like those don't explain away the success of smaller apparel companies. Take Jones Apparel Group, maker of Jones New York. Earnings at the 24-year-old company are expected to jump 14 percent to $56.9 million in 1994. And net income at newcomer Norton McNaughton Inc., which went public in February, is projected to soar 156 percent to $8.6 million in the fiscal year ending in October, according to Mabon Securities.

Even Liz Claiborne herself is grumbling about what's happened to her former company. Pondering the company's recent setbacks-besides the disappointing performance, the loss of Margolis and Saks Fifth Avenue's decision to drop the company's sportswear labels-Claiborne told an industry trade publication last summer that her "distress has deepened, because it's my name that's associated with all these events."

The company isn't winning over investors, either. Its stock, considered the Big Chip of the apparel industry, hit a high of $50.75 on June 30, 1991, and since then has tumbled to $21.50 in recent trading.

Even if the product lines are successfully rejiggered, Claiborne isn't completely on the mend: It still has to make its clothes appealing, something it hasn't been able to do for a while, said Peter Schaeffer, an analyst at Dillon Read & Co.: "It's just mundane goods that aren't exciting."